The Richards Bay property market has boomed over the last year, ending with the highest turnover in over five years, driven by the interest rate, which remains historically low despite the recent hikes and the favourable bank lending conditions.
Elaine Chetty, licensee for Seeff Richards Bay says the area is home to a bustling real estate market. The city is located midway between Durban and Kosi Bay. The establishment of the Richards Bay Port about forty years ago essentially transformed it from a small coastal town into an industrial city.
Yet, she says it remains laid-back, offering a fabulous coastal lifestyle with beautiful scenery including wetland areas and unspoilt beaches. The proximity to Durban and Gauteng makes it a popular holiday destination. All of these factors are important for the market which she says continues to outperform broader expectations.
Lightstone data shows that market turnover over the last year has come close to R1 billion (R949,620) with 767 property transactions at an average price of R1,238 million. This is the highest volume and value of transactions in over five years.
Mrs Chetty says that her team has stood the test of time and enjoyed one of the best sales years over the last year. Seeff Richards Bay was named the “Seeff Group Licensee of the Year” for the second consecutive year in 2021. It has also been nominated in the “best estate agency” category of the Best of Zululand Awards for this year.
The market remains driven by affordability with the bulk of activity below R1.6 million. The most active price band is between R1 million to R1.5 million. While Lightstone shows the average price for sectional title property at around R976,000, buyers can still find stock on the market from just R500,000 and townhouses from around R900,000.
The average price for a freestanding house is R1.5 million based on deeds office data, but Mrs Chetty says there is still value to be found below that with current stock ranging from around R700,000 to R2 million for an average family house.
There is also a choice of property for upper-income buyers with luxury homes in areas such as Meer en See ranging to around R17 million for a spectacular home on a plot of over 19,000sqm located on the canal with unparalleled views over the yacht club and Bay.
Mrs Chetty adds that the rental market continues at pace, although having had to absorb some of the challenges brought about by the Covid pandemic. Demand for rentals is driven by a number of factors including a large number of industries with people needing rental accommodation.
The highest demand tends to be in the sectional title sector of the market, but there is also perennial demand for freehold houses.
Apartments rent from around R4,500 per month, townhouses from around R6,000, and houses from R7,000. Top-end rentals range to around R27,500 per month for a three-bedroomed apartment and R44,000 per month for a four-bedroomed house in the luxury Mzingazi Golf Estate.
The outlook for the market remains particularly upbeat, she says further. While the two recent interest rate hikes will no doubt affect households, the rate remains at the lowest level in decades and an inducement for buyers.
The banks are also still keen to lend with deposit requirements the lowest for some time. Buyers are able to find higher loan-to-value bonds while qualifying first-time buyers can still secure 100% bonds, often with costs on top of that.